Very Profitable Heiken-Ashi System

I, like many others, have been searching for the perfect trading system, and I believe I have found it. I'm writing to ask you to examine this system and provide any constructive feedback that you might have.

When I say "perfect" trading system, I do not mean to imply that it has no losses, but what I mean is that it is "perfect" for my trading style and my 3 requirements.

Here is a list of the requirements that I had set out for the system, followed by the system itself, and then I will attach the only indicator I use:

Requirements:

1.Must be "set it and forget it" system, as I am in the air 3-4 days a week and cannot monitor the markets intraday.

Start with .10/pip (1000 units at Oanda) or micro lot for every $3,000.00.

double up on every loss, maximum 9 losses

Backtesting:

I have backtested this system for the months of June through October 2006, and am continuing to backtest for Novemer and December. I will post the results in a spreadsheet on the next post down.

Summary:Out of the 5 months backtested this system produced the equivalent of 3414 pips. I say the "equivalent of" because when I would "double up" on a loss I had to put twice the number of pips actually one, so the spreadsheet would equal the dollar amount won correctly.

Concern:Many people say that doubling after a loss is dangerous and risky. To alleviate some of the risk I start with very minimal lot sizes. Obviously this has the adverse affect of not growing the account very rapidly when you get a string of all winners. But this adverse affect seems to be offset by the reality that you really never have a losing trade because all losses are more than offset by the doubling up of the winners.

Any feedback you have would be appreciated, or if anyone is able to test this system back several years with backtesting software, please let me know.

I, like many others, have been searching for the perfect trading system, and I believe I have found it. I'm writing to ask you to examine this system and provide any constructive feedback that you might have.

When I say "perfect" trading system, I do not mean to imply that it has no losses, but what I mean is that it is "perfect" for my trading style and my 3 requirements.

Here is a list of the requirements that I had set out for the system, followed by the system itself, and then I will attach the only indicator I use:

Requirements:

1.Must be "set it and forget it" system, as I am in the air 3-4 days a week and cannot monitor the markets intraday.

Start with .10/pip (1000 units at Oanda) or micro lot for every $3,000.00.

double up on every loss, maximum 5 losses

Backtesting:

I have backtested this system for the months of June through October 2006, and am continuing to backtest for Novemer and December. I will post the results in a spreadsheet on the next post down.

Summary:Out of the 5 months backtested this system produced the equivalent of 3414 pips. I say the "equivalent of" because when I would "double up" on a loss I had to put twice the number of pips actually one, so the spreadsheet would equal the dollar amount won correctly.

Concern:Many people say that doubling after a loss is dangerous and risky. To alleviate some of the risk I start with very minimal lot sizes. Obviously this has the adverse affect of not growing the account very rapidly when you get a string of all winners. But this adverse affect seems to be offset by the reality that you really never have a losing trade because all losses are more than offset by the doubling up of the winners.

Any feedback you have would be appreciated, or if anyone is able to test this system back several years with backtesting software, please let me know.

timbobo:Expert to use with the abovementioned indicator. I'm sorry but with your settings it lose money on any timeframe.

Expert works with single order fixed lot and does not use Martingale money management. Use it just to test the general idea.

This strategy makes only 40% profitable orders. It means that random entering to the market will be more succesfull than using this strategy.

Thank you for your comments. On my 5 months of back testing the stats were different, showing 54% hit rate. I acknowledge it is the Martingale money management that makes this system profitable, but I only care that it is indeed profitable, not how it gets that way.

I wish you luck, but I think you'll find you'll get bitten in the end. The answer to the trading conundrum is risk/money management and an edge. This way you are prepared for anything the market throws at you.

As somebody else posted on another thread here, you might find this interesting.

rogerha:I wish you luck, but I think you'll find you'll get bitten in the end. The answer to the trading conundrum is risk/money management and an edge. This way you are prepared for anything the market throws at you.

As somebody else posted on another thread here, you might find this interesting.

Wow, that is a sobering blog, it is apparent that the drawdown of his system affected him dramatically. And yet for all my testing and trading over the previous years I have not found any system that does not have drawdown, some of them substantial drawdown (in the 20-50% range).

This system I am testing now had a 24.9% drawdown, which I admit is substantial. And yet for me, it meets all my other requirements, so time will tell if I am able to live with a drawdown like this.